Nuclear Sector Deal

Sam Gyimah Excerpts

Thursday 28th June 2018 Commons Chamber

[John Woodcock (Barrow and Furness) (Ind)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the nuclear sector deal.

[The Minister for Universities, Science, Research and Innovation (Mr Sam Gyimah)]

The Business Secretary is currently in north Wales, in Trawsfynydd, launching the nuclear sector deal, which is why I am here in his place.

The industrial strategy sets out how long-term partnerships between the Government and industry can create significant opportunities to boost productivity, employment, innovation and skills. We committed to agreeing sector deals with industries that put forward ambitious proposals to boost productivity and earning power in their sector. The Government are today launching the nuclear sector deal, the fifth in a series of deals, as part of their industrial strategy. I would like to take this opportunity to praise the long-standing support and work of the hon. Gentleman’s predecessor, Lord Hutton of Furness, who has helped to facilitate the deal today from the industry side.

The nuclear sector in the UK is an economic powerhouse, equivalent in scale to the aerospace industry. It provides highly skilled, long-term employment for 87,500 people and is a driver of regional growth. Nuclear generation provides more than 20% of the UK’s electricity supply, and its low-carbon, reliable baseload power complements the growing renewable portfolio that is enabling the UK to reduce CO₂ emissions in line with our commitments. The nuclear sector deal announces a package of measures to support the sector as we develop low-carbon nuclear power and continue to clean up our nuclear legacy.

The deal is about the Government and industry working in partnership to drive competitiveness across the nuclear sector. We will use these initial actions as a platform for future collaboration and investment in the sector. The Government have notified Parliament of today’s deal by means of a written ministerial statement and deposited a copy of the sector deal in the Libraries of both Houses. This is a good day for the nuclear industry and for Wales, where we are focusing on small modular reactors that can help Wales become a world leader in this sector.

[John Woodcock]

I thank the Minister for reading studiously from the brief presented to him, but why on earth did the Business Secretary, or indeed the Minister for Energy and Clean Growth, not see fit either to come to Parliament or to make themselves available to answer questions on this important issue, but instead issue a press release last night and allow us as Members of Parliament to read about it?

The deal is indeed welcome, and I join the Minister in praising my predecessor, Lord Hutton, for the work that he did when in this Chamber and which he now does in his role in the civil nuclear industry in pushing the Government along on this. Can the Minister say more about small modular reactors? How many do the Government expect there to be within the next 10 years? How will the Government ensure that British firms and British research and development, and not simply foreign direct investment, benefit? Can he guarantee that this will supplement the larger civil nuclear build, rather than replace it? Planning for the long term, as this strategy seeks to do, is important and right, but as I hope he knows, the industry faces potential crisis now. What is happening on Euratom? Can he guarantee that standards will be maintained absolutely and that there will be sufficient people to deliver them as we approach the cliff edge?

What is the Government’s position on direct investment? Will the Government now pledge to invest directly in Moorside, as they are planning to do in Wylfa? More than 20,000 jobs are at stake in south Cumbria unless the Government act on that.

Talk of supporting nuclear clusters is all very well, but will the Department for Business, Energy and Industrial Strategy intervene directly with the Department for Transport in Cumbria and stop the wonderful, world-class nuclear cluster that we could have there being inhibited by the fact that we have to drive through a farmyard to get from civil nuclear in the west to the nuclear submarine building programme in the south, in my constituency?

[Mr Gyimah]

I understand the hon. Gentleman’s concern, but a written ministerial statement is being laid before Parliament today, and I reiterate that the Secretary of State and the Energy Minister are in Wales, launching the nuclear sector deal as we speak. Given the hon. Gentleman’s long-standing, diligent campaign in this area, I am happy to offer him a meeting with the Secretary of State and officials as soon as possible, to go through all the elements of the deal and especially its impact on his constituency.

The hon. Gentleman asked how many small modular reactors there would be. The honest answer is that the number is not set at the moment. The Government are recognising the potential for such reactors and investing in research and development.

On direct investment and whether we will pledge to do the same for Moorside as for Wylfa, I understand the hon. Gentleman’s particular interest. Our priority is to build the infrastructure that the country needs in a way that delivers value for money for taxpayers. On 4 June the Secretary of State made a statement to Parliament, announcing direct Government investment in the Wylfa Newydd project. For future projects we are looking at the viability of a regulated asset model, as we have done before.

Safety and security is obviously a top priority and we will work with the sector and regulators to ensure that our staff are in place, but I reiterate the offer of a meeting as soon as possible, at which the hon. Gentleman may discuss all the details with officials and Ministers.

[Trudy Harrison (Copeland) (Con)]

This is a brilliant day and I am delighted that the Government are demonstrating their recognition of our nuclear sector. I was particularly pleased to see the reference to 40% more females working in the industry by 2030, and I hope the Minister will join me in acknowledging the work that the women in nuclear do, but also the barriers, because often, nuclear licensed sites are in coastal, rural locations where affordable, flexible, high-quality childcare is simply not available at the moment. I hope he will work with me in improving that in my constituency. The Minister talks of the 87,500 workers in the nuclear industry. In Cumbria, we have 27,000 of those; we are absolutely the centre of nuclear excellence.

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[Mr Gyimah]

My hon. Friend, who has campaigned assiduously on this issue since she joined the House, makes a very good point around the commitment to increase the number of women working in the sector. That is a significant commitment, and one that we are determined to deliver on.

More generally, for Cumbria, a major component of the deal is support for lower-cost decommissioning using advanced manufacturing techniques, so Cumbria is set to benefit, as it is from Sellafield which, as my hon. Friend said, employs several thousand people and leads on some of the most complex decommissioning challenges.

[Bill Esterson (Sefton Central) (Lab)]

I welcome the publication, albeit delayed, of a nuclear sector deal, but the Secretary of State really should be here to announce the deal, not least so that we can get some answers to the questions asked by my hon. Friend the Member for Barrow and Furness (John Woodcock), which we did not in the Minister’s previous response. Nuclear energy plays an important part in reducing our reliance on fossil fuels and in delivering jobs and prosperity to the parts of the country that most need investment, not least my hon. Friend’s constituency. We very much welcome the 40% target of women working in the civil nuclear sector by 2030, but when is it going to be 50%?

This announcement is mostly a repackaging of existing policy. Of the headline £200 million, it seems that only £10 million is new Government funding, so will the Minister confirm the £56 million for R&D for advanced modular reactors and the £86 million for a national fusion technology platform, both announced last December, and the £32 million for an advanced manufacturing and construction programme, which was unveiled last month? Will he also confirm why there has been a considerable downgrade in the funding available for small modular reactors? In 2015, the then Chancellor said that £250 million would be allocated to small nuclear reactors. At the end of 2017, the Department said that £100 million would be allocated, and now it is just £56 million.

The Minister mentioned Wales, so will he take the opportunity to clarify the Government’s funding arrangements for the Wylfa plant in Anglesey? In the week when the Government have scrapped the Swansea Bay tidal lagoon, it has become clear that different rules apply for different technologies. This announcement should have been made alongside a commitment to invest in tidal energy. Both are equally important. The Committee on Climate Change says today that the Government are failing to keep up with agreed targets on decarbonisation. With this week’s announcement to scrap the Swansea Bay tidal lagoon, the expansion of airport capacity and the modesty of the nuclear sector deal, will he tell us how the Government are going to meet their climate change obligations?

[Mr Gyimah]

On the question of there being no new money here, that is not correct. The deal announced today has £20 million for advanced manufacturing, £10 million for supply chain support, £40 million for potential hydraulics facilities in north Wales and £32 million of industry money, and potentially more to come. That is new money. On the much broader question of tidal energy versus nuclear, to reiterate the arguments that have been made in the House already this week, the Swansea bay proposal would cost £1.3 billion to build but would have produced only 0.15% of the electricity we use each year—a capital cost that is more than three times as much per unit of electricity as Hinkley Point C. The same power generated by Swansea over 60 years would cost only £400 million for offshore wind, even at today’s prices. There are some people you can never please, but as my hon. Friend the Member for Copeland (Trudy Harrison) said, today is a good story for the nuclear industry, and I hope that Opposition Members join us in welcoming it.

[Mark Pawsey (Rugby) (Con)]

I welcome today’s sector deal and particularly the role for small modular reactors, which are an obvious replacement for decommissioned coal-fired power stations. Will the Minister confirm that today’s announcement means that nuclear remains a key part of our energy mix, providing a diverse energy source as part of this Government’s industrial strategy?

[Mr Gyimah]

My hon. Friend is right: nuclear is a key part of the energy mix and we are looking for low-cost, reliable and stable sources of energy. That is why our industrial strategy is focusing today on a nuclear energy deal to deliver precisely that.

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

With Mark Carney saying that Brexit has cost each household £900, this Government’s support for costly nuclear energy is a further blow to household budgets. The deal coincides with the proposed nuclear power station at Wylfa in Anglesey in north Wales with a trailed strike price of around £80 per megawatt-hour, brought down from Hinkley’s £92.5 per megawatt-hour through UK Government support with capital costs. This is still significantly more than wind, which comes in at around £57.5 per megawatt-hour, even including intermittency costs. Having failed the North sea in its time of need and abandoned cost-effective carbon capture and renewables technology, why do the UK Government persist with an energy policy that continues to fail Scottish industry while hiking cost for consumers?

[Mr Gyimah]

We have become accustomed in this House to Scottish National party MPs doing one thing north of the border and saying a different thing south of the border. The former Member for Gordon, when he was First Minister, backed the life extension of the nuclear plants in Scotland, so I am surprised that faced with this deal they are not welcoming the jobs in the supply chain from which Scotland will benefit. Yes, we are focused on nuclear, but as part of a balanced approach to ensure that we have the energy sources we need for the future.

[Julian Knight (Solihull) (Con)]

This announcement is very welcome indeed, particularly in relation to the under-representation of women in the nuclear industry. Has there been any scoping as to the positive impact on emissions of this new investment?

[Mr Gyimah]

My hon. Friend is right to point out the commitment to women. Currently, the percentage of women in the sector is 22%. We believe that is far too low. Forty per cent. is an ambition we intend to meet and build on, although that does not seem to be enough for the Opposition. The impact on emissions has been considered. I draw the attention of Members to the nuclear deal, which is in the House of Commons Library.

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[Mr Speaker]

I will assume the insertion of a question mark.

[Mr Gyimah]

I welcome the extended question from the hon. Lady. She is absolutely right to say that small modular reactors in Wales could position Wales as a world leader. It is encouraging to see Ministers from Westminster at the launch today. They are working closely in partnership with Welsh Government officials. I believe that that is how we are going to make this a success. On the broader question, we will do everything possible to make this work for Wales.

[Maggie Throup (Erewash) (Con)]

I too welcome today’s announcement. Will the Minister do whatever he can to back the new industrial research and development advanced manufacturing research centre site planned for Derby’s Infinity Park, located alongside the global headquarters for Rolls-Royce, which already leads the way in small modular reactors?

[Mr Gyimah]

Part of the way to achieve success in this area, and indeed in most other areas of science, is to have clusters around the country. Part of the industrial strategy is to ensure that where such clusters exist, support is available for them to be successful, as with the one in Derby that my hon. Friend mentions.

[Mike Gapes (Ilford South) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Barrow and Furness (John Woodcock) on once again assiduously doing his job as a constituency Member. He asked a question of the Minister which was not answered: what is going to happen with regard to Euratom, particularly if we crash out with no deal? Can the Minister assure us that we will continue to be in Euratom through the transition period and after any agreement?

[Mr Gyimah]

The Prime Minister has made it clear that, as part of our negotiations with the EU, we want to associate with Euratom research and training, as well as the new science and research programme, Horizon Europe. We are working on that and look to be a full partner with the EU, paying our share of the costs. Obviously, as part of the implementation period we will continue to be a part of it. The rest is subject to negotiations, but we have made it very clear to the European Union that we want to continue to associate.

[Mike Wood (Dudley South) (Con)]

What will the impact be of the measures associated with this deal on the cost of new nuclear power stations and on decommissioning former nuclear sites?

[Mr Gyimah]

That is a very good question. The deal should reduce the cost of decommissioning—while, obviously, maintaining the highest safety standards—but it will also bring us up to date with modern methods.

[Stephen Lloyd (Eastbourne) (LD)]

The costs of all renewable technologies, including wind and solar, have fallen faster than almost anyone predicted, and they now represent much better-value low-carbon energy. However, the Government cut investment in renewables by more than 50% in 2017, and just this week they rejected proposals for the Swansea Bay tidal lagoon. Is this additional investment in nuclear further evidence that the Government are turning their back on renewables?

[Mr Gyimah]

On the contrary. Since 1990, the UK has cut emissions by 43%, while our economy has grown by more than two thirds. We have reduced emissions faster than any other G7 nation, while leading the G7 countries in growth in national income per person. We are actually increasing our economic growth, while at the same time ensuring that we are doing what we need to do for the environment by promoting clean growth.

[Bob Blackman (Harrow East) (Con)]

Given the good news that the Minister has announced, I am surprised that it took an urgent question from the hon. Member for Barrow and Furness (John Woodcock) to secure a Government response.

Will my hon. Friend update us on what will be done to enable small modular reactors to be spread across the United Kingdom, so that we can cease to rely on fossil fuels?

[Mr Gyimah]

The Government do not intend to hide their light under a bushel in terms of the good news. My hon. Friend can find the paper on the sector deal in the House of Commons Library. As for the promotion of small modular reactors across the UK, it is part of our industrial strategy, but the nuclear sector deal and our work with the industry will help in a specific way.

[Thangam Debbonaire (Bristol West) (Lab)]

The Minister said that the Government’s priority was to build the infrastructure that the country needs, but, with barely a mention of climate change, his announcement must seem like hollow words to the people of south Wales and the west of England, coming as it does in the same week as the decision not to support the Swansea Bay tidal lagoon. When will the Government recognise the huge untapped potential of tidal energy, and get serious about climate change?

[Mr Gyimah]

I have already made it very clear that the Government have succeeded in cutting our emissions while increasing growth. The nuclear sector deal is part of our ambition for cleaner growth in this country. I know that Opposition Members do not agree with the decision on the tidal lagoon, but it is clear that the same power generation over 60 years with offshore wind would cost only £400 million, even at today’s prices. Sometimes it is necessary to look at the hard facts and make decisions based on those.

[Kevin Foster (Torbay) (Con)]

Given the role that the nuclear industry plays in providing highly paid and highly skilled jobs throughout the south-west, including south Devon, this announcement is very welcome, but how does the Minister envisage the benefits of the sector deal being spread across the United Kingdom, and particularly into the south-west of England?

[Mr Gyimah]

I expect the benefits to be spread across the country. There will be up to £2 billion-worth of domestic and international contract wins, which will help the supply chain of the nuclear industry throughout the country.

[Diana Johnson (Kingston upon Hull North) (Lab)]

I, too, congratulate my hon. Friend the Member for Barrow and Furness (John Woodcock) on securing the urgent question.

Renewables are also an important part of our energy mix, and in east Yorkshire, particularly with offshore wind, we are leading the world in that development. When might we see a sector deal for renewables, and can the Minister tell us when we will be given more details about the sector deals for local areas which the Government announced, I think, last year?

[Mr Gyimah]

As part of our industrial strategy, we committed ourselves to a series of sector deals. So far, five have been announced, including the life sciences deal, the automotive sector deal, the artificial intelligence deal, and the nuclear sector deal announced today. We are looking for opportunities across the board, and if there is an opportunity for us to develop a sector deal working with industry, we are willing to proceed. As the hon. Lady knows, clean growth is one of the four grand challenges in the industrial strategy, and we will make sure that we do everything we need to do to make a success of it.

[Mr Philip Hollobone (Kettering) (Con)]

The Minister has confirmed that the new nuclear sector deal plans to reduce the costs both of new-build nuclear projects and of decommissioning old nuclear sites. By how much and by when?

[Mr Gyimah]

We can always on my hon. Friend for a very precise question. We expect, by 2030, a 30% reduction in the cost of new-build projects. We also want, by 2030, to improve diversity across the sector by achieving 40% female participation, as I mentioned. Again by 2030, we expect to achieve savings of 20% in the cost of decommissioning.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Is the Minister aware that I spent seven happy years as a councillor in Lliw Valley near Swansea in south Wales? I am therefore very disappointed that this morning’s announcement, which I welcome, could not have been combined with the right decision this week on the Swansea Bay barrage scheme. While I am in favour of small nuclear energy initiatives and hope they will spread, is there not still a question mark over what we do with nuclear waste? We still have not resolved that, and it is still a real problem and a real challenge for our society. Will he give an assurance that we will have an answer?

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[Mr Speaker]

I had not been aware of the hon. Gentleman’s distinguished career in local government, but I am now.

[Mr Gyimah]

Nor had I been aware of the hon. Gentleman’s distinguished career, Mr Speaker—you learn something new every day in this House.

I can give the hon. Gentleman the assurance that safety is absolutely paramount in the plans that the Government have. On the tidal lagoon, the proposed programme would have cost the average household consumer up to £700 between 2031 and 2050. Each week in this House, there is a question about what we are doing to bring down the cost of energy. We are not against tidal lagoons, but we cannot support every project at any price, and that is why we made the decision that we did.

[Nick Smith (Blaenau Gwent) (Lab)]

This is a good nuclear sector deal, but are tidal lagoons totally off the agenda now?

[Mr Gyimah]

As I said, we are not against tidal lagoons, but they must demonstrate value for money for consumers and public funds.

[Mrs Madeleine Moon (Bridgend) (Lab)]

The electronic infrastructure summit held this week in London urged the need for independent cyber-security audits across critical national infrastructure, particularly in the energy sector. Does the Minister agree that nuclear is one sector where we urgently need to ensure that cyber-security keeps us free from attacks and black sky events?

[Mr Gyimah]

The hon. Lady identifies a risk to this critical infrastructure. I can assure her that we take all the steps necessary to make sure that it is protected, and cyber-security is one of those.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

In Scotland, the nuclear energy sector is worth £1 billion a year, employs 12,000 people, and generates 35% of the nation’s electricity in a stable and consistent way. Scotland’s four advanced gas-cooled reactors are due to be decommissioned and taken offline by 2030. Has the Minister had any discussions with his Scottish ministerial counterparts on the huge industrial opportunity that this presents for Scotland at Hunterston and Torness after 2030?

[Mr Gyimah]

I am glad that the hon. Gentleman has recognised that there is a huge opportunity for Scotland in this deal, given how much Scotland participates in the supply chain. As we are doing with the devolved Government in Wales, we will be working with all the devolved Administrations, where this is relevant to them, to make a success of this deal.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his statement. Does he agree that an essential component of this deal is the research and development component to make the use of nuclear power safer and more effective, and to better harness the ability of the UK to produce our own energy as opposed to relying on middle eastern fuel?

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[Mr Gyimah]

The hon. Gentleman is right to point to the R and D component as critical to success in this field. In the industrial strategy we have committed to increase the R and D spend from the current 1.7% to 2.4% of GDP by 2027. This will be a mixture of public and private investment, and by achieving this huge commitment—£80 billion over the next decade—we will be able to do the sorts of things we need to do here in nuclear to make sure we have a secure source of energy.